The Carillion collapse and capital

Published Tue 15 Jan 2019

Issue No. 2637

The firm had more than £1 billion of public money incontracts every year (Pic: Elliot Brown/Flickr)

Carillion, a former giant firm in construction, outsourcing and privatisation, went bust one year ago. It was one of the go-to firms to get rid of public services, first with New Labour and now with the Tories.

The Carillion group received more than £1 billion of public money in government contracts each year.

It oversaw hospitals, schools and prisons, and had part of the contract to build HS2. Despite the scale of Carillion’s collapse, no action has yet been taken against any of Carillion’s top bosses.

This is despite longstanding investigations by the regulator into accountants and auditors.

The government’s pension regulator has also failed to deliver any recommendations from its investigation into the £800 million shortfall in the firm’s pension. The shortfall leaves thousands of former employees out of pocket.

The lifetime value of outsourcing contracts awarded in 2017-18 “rocketed” by 53 percent from £62 billion to £95 billion in the past year, according to the GMB union.

Notably nearly £2 billion in contracts has been awarded to Capita and Interserve last year, despite both issuing profit warnings.

This is the reality of capitalism, a system based on maximising profits. If it’s a chance for the Tories to hand money to the bosses then there are no lessons to be learnt at all.